How the Logistics Industry is Helping the Environment

Ever since the industrial revolution, there has been significant
changes in the environment due to human activities. Environmental degradation
due to pollution and other human activities pose a serious threat to mankind.
There is a need for all industries to embrace the goal of sustainable
development and commitment towards environmental protection. Government
regulations and growing awareness among the people has made it imperative for
businesses to come up with business strategies that incorporate sustainability
goals in their agenda.

Logistics is one of the most important part in the business value
chain across all industries. The transportation of goods via different vehicles
is a source of carbon emission and adversely affects the environment. There is
a growing need for players in this segment to integrate ‘green’ methods in
their operations.

Key
developments in logistics helping the environment

There have been significant developments in the logistics sector
that have helped enterprises reduce the damages to the environment. The
adoption of digital logistics has been a game-changer in this field. The use of
advanced analytics and machine learning algorithms are making logistics
operations much more environment friendly. The key functionalities helping the
cause are:

Capacity utilization

There is a huge problem of LTL (Less Than
Truck Load) in the logistics industry which increases cost and adds more carbon
to the atmosphere. Digital logistics helps in utilizing the full capacity of
not only trucks but also other vehicles in the fleet. This is achieved by the
use of sophisticated algorithms. Higher capacity utilization leads to less
number of trips and subsequently lead to lower emission of greenhouse gases and
pollutants.

Auto-routing

The adoption of software-based auto-routing
instead of traditional spreadsheet based approach is unlocking new efficiencies
in the value chain. Algorithm-based auto routing provides best routes for goods
transport thereby reducing the distance traversed by the fleet. It also reduces
the time spent in traffic jams. This helps in reducing the fuel consumption and
the emission of CO2 and other gases by a significant margin.

Electronic documentation

The traditional documentation process during
shipping, receiving and transit requires a lot of paper which has a direct link
to deforestation. Digital logistics makes the entire documentation process
automated and electronic, thereby significantly contributing to reduce
deforestation by foregoing the usage of massive amounts of paper.

Trends in
logistics that are going to boost sustainable development

The logistics industry is set to be in the cusp of technological
revolution. New breakthroughs in technologies and their rapid adoption would
help industries reduce their carbon footprint and be more environmentally
responsible. The key trends are:

Electrified logistics fleet

Logistics service providers are experimenting
with the use of electric vehicles in their fleet. Some players are using
e-bikes for inner-city deliveries. The application of electric vehicles has
been concentrated in the last mile segment as of now. The shift from
hydrocarbon vehicles to electric vehicles will significantly lower the
environmental impact of logistics operations.

UAV/Drone

The usage of UAVs (Unmanned Aerial Vehicle) in
logistics is in nascent state. However, companies like Amazon, DHL, Google are
experimenting in this field. Amazon has even started delivery via drones in its
‘Prime Air’ service. Drones are more efficient as they need to cover much
lesser distance than on-road fleets and are battery operated. The usage of
drones in the future would lower the overall environmental impact of firms in
the logistics sector.

IoT

IoT (Internet of Things) is an ecosystem of
connected devices that communicate in real time. Cloud-based RFID chips, GPS
trackers, advanced vehicle telematics, sensors constitute IoT. It makes
communication possible between infrastructure and vehicle, vehicle and vehicle,
infrastructure and infrastructure. The seamless flow of information would help
in optimizing the entire network and scheduling; reducing distance traversed
and idle engine time thereby reducing greenhouse gas emission. Smart sensors
placed in vehicles would help in continuously monitoring the fuel emission and
help keep negative impact on the environment in check.

The Middle East region is the
strategic hub for international trade and commerce between the east and the
west. According to Statista, the revenue generated by the Logistics sector in
the Middle East is $40.2 billion as of 2016. The logistics industry is set to
grow in both value and volume in the future. The growth in this sector also
provides challenges in devising strategies to counter the environmental impact
of the same. Digital logistics and the application of other emerging
technologies like big data analytics, IoT, drone et al. will be necessary to
devise a sustainable growth in this sector. As per A. T. Kearney analysis, the
number of vehicles on the road is expected to double from 16 million in 2016 to
30 million by 2025. The application of IoT in the infrastructure and
transportation sector could potentially lower $117 million in fuel costs to
about half by 2025 resulting in massive decrease in the greenhouse gas emission
and make the logistics industry much more environment friendly.

The logistics industry is playing its
part in reducing damage to the environment caused due to human activities and
with the speedy adoption of smarter technologies, the future is going to get
better.